THE euphoria of last Wednesday's record rally has all but disappeared as cautious investors pushed the Hang Seng Index down 41.61 points to 6,638.54 yesterday. Turnover dipped further to $3.36 billion. The market has now fallen for four consecutive days since hitting a record 6,789.74 points, knocking 151.2 off the index. Brokers said many investors were waiting on the sidelines until the meeting between China and Britain about Hongkong's political reforms began in Beijing tomorrow. Their hopes for positive news were dealt a blow when Mr Lu Ping, director of the Hongkong and Macau Affairs Office, said the upcoming discussions would be difficult. ''No one wants to be aggressive in the market,'' said Mr Adrian Ngan Wai-hung, research director of Vickers Ballas. ''There seems to be a lack of momentum for a rebound. People are not going to buy the market at this level.'' Uninspired market sentiment and profit-taking hit blue chips, with only five of the 33 index stocks closing higher. China Light and Power was the best performer after climbing 50 cents to $37.25. Hongkong Telecommunications took 13.23 points off the index with a 20-cent fall to $10. Brokers said investors were disappointed the company was teaming up with parent Cable & Wireless on a telecommunications venture in Asia rather than handling business in China by itself. The market opened yesterday on a sharp decline with 58.66 points chopped off the index after half an hour before bouncing back to 6,659.35 at lunchtime. In the afternoon, the index traded in a narrow range between 6,637.51 and 6,643.75 before the close of trading. Brokers said investors continued to concentrate on rooting out underpriced second-line stocks. Applied International was one of the most popular choices, posting the third-largest price increase - 14.5 per cent or 47.5 cents to $3.75. The stock was heavily traded with a turnover of $84.28 million as 22.78 million shares changed hands. Applied's stock has now jumped 87.5 per cent in the past two weeks. The company issued a statement in the afternoon stating it was not aware of any reasons for the increase in the prices of its shares and warrants. Paragon was the biggest mover with a gain of 24.5 per cent or 1.4 cents to 7.1 cents. It was also the heaviest traded with a volume of 110.42 million shares. Hansom climbed a further eight per cent or 12 cents to $1.62. This represents an 84-cent premium to the 78-cents-a-share offer made last week for a 58 per cent stake in Hansom. Sun Hung Kai was among the largest losers with a 6.6 per cent or 27.5-cent drop to $3.875. This came despite the company reporting a 50 per cent increase in profits.